JSE-listed Balwin Properties has reported sustained, strong demand for its apartments during the six months ended August 31.

“Despite rising interest rates and a constrained economy, client demand for our apartments remained strong and sales recognised in revenue closed up 8% for the period at 1 360 apartments. This was driven primarily by semigration to the Western Cape and our unique lifestyle offering with a focus on green living.

"We are also encouraged by the 1 551 apartments forward sold but not yet recognized in revenue, which will support growth in the next six months and beyond,” says CE Steve Brookes.

The group recorded revenue of R1.6-billion, a 20% increase on the R1.3-billion reported for the six months ended August 31, 2021.

Profit for the six months was up 48% to R173-million.

The higher revenue and profit were primarily driven by higher sales volumes of apartments handed over and improved profit margins respectively, Balwin says.

Balwin’s gross profit margin increased by 2% to 26%, as a result of focused cost containment measures together with more robust pricing on the sale of early-phase apartments.

The group’s net asset value per share increased to 771.39c, compared with 692c in the prior corresponding six-month period, while earnings a share increased by 48% to 36.88c and headline earnings a share by 47% to 36.63c.

Balwin further reported a strong cash position of R581.2-million at period-end.

The group has a secure development pipeline of 45 411 apartments across 27 developments in key target nodes. This represents an about 15-year development horizon.

“Our annuity business continues to gain traction and will make an increasingly meaningful contribution to group earning over time. Annuity contributed R37.9-million to group revenue during the period, an increase of 80%. Fibre and bond origination remain the mainstay of the annuity business, with Balwin Energy and other businesses, such as insurance, showing good prospects,” Brookes says.

During the financial year, Balwin continued to focus on reducing its environmental impact through innovation in design and building techniques.

An additional 3 563 apartments were registered as EDGE Advanced during the review period.

Balwin also became the first company in South Africa to have a science-based target and net=zero commitment approved by the International Science based target initiative.

“From an operational point of view, Balwin remains well positioned despite increasing headwinds and a rising interest rate cycle, with 1 551 apartments forward sold and sustainable demand for our brand. Where necessary, we will support apartment sales with short-term incentives and longer-term loyalty programmes.

“Our focus for the next six months remains on cost containment, appropriate cash management and maintaining our focus on core operations,” says Brookes.

An interim gross dividend of 9.9c an ordinary share was declared.